Jared Blum, the Executive Director of the EPDM Roofing Association (ERA), will speak at a symposium on “Facing the Storm: The Case for Business Resilience” to be hosted on June 11 by the Insurance Institute for Business & Home Safety (IBHS). Blum will participate in a four-person interactive panel discussion on what actions can be taken by varying stakeholders to break the cycle of “repeated and preventable damage.” Also participating on the panel will be Rachel Minnery, Senior Director of Resilience, Adaptation and Disaster Assistance at The American Institute of Architects; Ryan Colker, Vice President of Innovation and Executive Director, Alliance for National and Community Resilience at the International Code Council; and Alex Contreras, Director of Preparedness, Coordination and Communication at the Office of Disaster Assistance of the U.S. Small Business Administration.

“It’s an honor to be included on this prestigious panel of experts who are making valuable contributions to a more resilient future for American business,” said Blum, “ERA is committed to making the construction community aware of the need for resilience in the built environment, and the role that EPDM can play in creating a resilient roofing system.”

“The specific attributes of EPDM make it uniquely valuable in attaining resilience in a structure,” said Ellen Thorp, Associate Executive Director of ERA, “We applaud the work that IBHS has done to provide science-based information about the need for resilience, and ERA is excited about joining them to support their important work.”

Responding to the heightened interest in and concern over the resilience of the built environment, ERA last year published its first annual report on resilience, “Building Resilience: The Roofing Perspective” and launched its microsite, EpdmTheResilientRoof.org. To add context to the information about EPDM products, the website provides a clearinghouse of sources about resilience, as well as an up-to-date roster of recent articles, blog posts, statements of professional organizations and other pertinent information about resilience.

Small businesses are now able to deduct the full cost of replacing a roof on an existing non-residential building in the year the project was completed instead of depreciating that cost over a 39-year period, as was previously required. Photo: SOPREMA

It is fair to say that Washington, D.C., is far from dull. From the recent Tax Cut and Jobs Act to rolling debates on passing a federal budget, there is a great deal going on at the federal level that impacts the building and roofing industries. In particular, new reforms allow qualifying building owners to expense, or deduct, up to $1 million for the cost of certain building improvements in the year the work is performed, including adding insulation during roof replacement projects to meet or go beyond modern building energy code requirements. The impact can be significant for capital improvement projects. For example, a building owner that expenses the cost of a full roof replacement can reduce the net cost of the entire project by 25 percent to 30 percent.

Commercial Building Roof Replacements

The Tax Cut and Jobs Act, signed into law by President Trump on December 22, 2017, includes a provision that reduces the overall cost associated with re-roofing and significantly improves the cost-effectiveness of commercial roof replacements that comply with building energy codes. The vast majority of state and local governments require minimum insulation levels for both new roofs and roof replacements (but not for roof repairs or recovers). These requirements apply to existing buildings because the most economical time to improve a roof’s thermal performance is when the roof membrane is pulled off and replaced. Also, roof replacements are one of the best opportunities for improving energy efficiency in existing buildings, which account for 40 percent of U.S. energy use.

Starting in 2018, the new federal tax law expands the definition of “qualified real property” under the small business expensing provisions of Internal Revenue Code section 179 to include improvements to existing nonresidential roofs. Section 179 allows businesses to fully expense (deduct) up to $1 million (indexed for inflation after 2018) in one year for qualified business expenses, such as equipment purchases and specific building improvements. With this change, small businesses are now able to deduct — in the year completed — the full cost of replacing a roof on an existing non-residential building instead of depreciating that cost over a 39-year period, as was required under prior law. As a mechanism intended to limit the deduction to small businesses, the benefit is phased out for businesses that spend more than $2.5 million (also indexed for inflation) on qualified equipment and real property. This change takes effect in 2018 and, unlike some provisions of the new law, is permanent.

A typical scenario under which a commercial building roof replacement is required to comply with a building energy code is one where an older building with a low-slope roof has R-11 or R-12 insulation in the roof prior to the roof replacement. The R-12 assumption is based on a U.S. Department of Energy (DOE) study that evaluated the level of existing insulation in commercial building roofs. For most of the country, current building energy codes require roof replacements to have a minimum level of R-25 or R-30, depending on the climate zone.

The average simple payback period for meeting the energy code is 11.6 years, according to a comprehensive energy modeling study completed in 2009 (“Energy and Environmental Impact Reduction Opportunities for Existing Buildings with Low-Slope Roofs,” produced by Covestro).

The payback period is the amount of time it takes for the energy savings to equal the cost of installing the additional insulation. By allowing a building owner to deduct the full cost of the roof replacement, including the cost for installing additional insulation, the net cost of the entire project is reduced by 25 percent to 30 percent, depending on a tax payer’s tax rate. (The Tax Cuts & Jobs Act reduced the corporate tax rate to 21 percent, but the pass-through rates, which are more relevant to small businesses, are closer to 30 percent, which increases the impact of this new deduction.) More importantly, the deduction shortens the average payback period on the cost of installing additional insulation to 8.1 years, making the investment in energy efficiency even more cost effective for the building owner.

Disaster Relief Reforms and Resilient Buildings

Recent maneuvers by Congressional budget writers provided several positive reforms that will impact the resiliency of buildings in some of the most vulnerable parts of the country.

First, Congress passed improvements to the Federal Cost Share Reform Incentive that increases post-disaster federal cost-share with states from 75 percent to as high as 85 percent on a sliding scale based on whether a state has taken proactive steps to improve disaster preparedness. These steps can include the adoption and enforcement of the most recent building codes. This further incentivizes states to maintain robust and current building codes, including the energy code.

Second, under reforms to the Stafford Act, federal disaster relief funds administered by the Federal Emergency Management Agency may be used to replace or restore the function of a facility to industry standards without regard to pre-disaster condition and replace or restore components of the facility not damaged by the disaster where replacement or restoration is required to fully restore the function of a facility. This allows post-disaster funds to be more effectively used to improve the resiliency of damaged buildings and should create opportunities for higher performing roof systems to replace those damaged in disasters.

While the built environment is likely to benefit under recent Congressional action, other policy priorities for the construction and energy efficient industries have been left unresolved. For example, Congress “extended” several clean energy and energy-efficiency related tax provisions, including the Section 179D deduction for commercial building energy efficiency. However, in head-scratching fashion, this and other tax provisions were only extended through December 31, 2017. This means more work is ahead to preserve the policies for the long term and add much needed certainty to the marketplace.

Unpredictable is a polite (and likely understated) description of the policy environment in our nation’s capital. You need not look beyond the recent FY2018 budget deal for an example. Building energy efficiency advocates spent countless hours educating lawmakers on the importance of funding federal research led by the Department of Energy (DOE). Fearing a federal budget that would cripple these vital programs by slashing budgets, advocates saw an 11 percent increase to the DOE’s Office Energy Efficiency and Renewable Energy budget, which leads research on building energy performance. And while history is a poor predictor of future success, recent action impacting buildings demonstrates that policymakers understand the need for strong policies that encourage and lead to more efficient and resilient construction.

The recent White House Conference on Resilient Building Codes emphasized the critical role of building codes in helping create more resilient communities and highlighted the importance of strong construction standards, such as those in the Tampa, Fla.-based Insurance Institute for Business & Home Safety’s (IBHS’) FORTIFIED programs.

Several speakers at the White House event highlighted IBHS’ FORTIFIED building standards and methods for new construction and retrofitting existing buildings.

In addition, IBHS made several commitments in conjunction with the White House event, including:

To work closely with FEMA, the White House, other federal agen- cies, and several states to increase public awareness and use of FEMA P-804, “Wind Retrofit Guide for Residential Buildings”, which mirrors technical knowledge underpinning the IBHS FORTIFIED Home-Hurricane standard.

To work with partners in 2016 to integrate IBHS guidance for enhancing resilience of commercial properties into federal, state and private initiatives.

To work with the National Institute of Building Sciences, Washington, and other allies to provide funding and unique engineering expertise so studies providing essential proof points about the value of loss mitigation are completed expeditiously. NIBS’ Multihazard Mitigation Council’s 2005 “Mitigation Saves” report found that every $1 invested in mitigation by FEMA saves society $4. The new report will be an enhanced study to identify the benefits of public and private investment in property loss mitigation.

Dave Caldwell doesn’t have to travel into the future to see how a sustainable beach house—a complete rebuild of a home destroyed by Hurricane Sandy—in Westerly, R.I., will survive the next major storm. Half an hour northeast along the coastline, on the ocean side of Narragansett Bay, stands a testament to resiliency, another new home that Caldwell built in October 2012, just two weeks before Sandy swept in.

The Westerly, R.I., coastal home features an asphalt laminate shingle and integrated solar shingle roofing system.

Featuring the same asphalt laminate shingle and integrated solar shingle roofing system, the Narragansett Bay home weathered the worst storm to hit the Ocean State in more than half a century, emerging unscathed while 1,000 other coastal Rhode Island properties incurred a combined $35 million in damage. The home’s survival demonstrated the power of construction techniques used to protect against the forces of nature—techniques that Caldwell repeated in the re-creation of the Westerly home.

For Caldwell, the second-generation owner of North Kingstown, R.I.-based Caldwell & Johnson, a design-build firm founded in 1968, the construction industry’s response to Hurricane Sandy only validates an approach to sustainable building that emphasizes long-term value over one-time costs. He says the owners of the Westerly home, a retired couple from South Carolina, were not afraid to put a little money into making the building stout and durable after their previous home was destroyed by the storm. “The goal,” he says, “was to sit and watch the next category 5 hurricane blow through.”

HURRICANE DESTRUCTION AND ITS AFTERMATH

It’s a good thing nobody was at the Westerly home in late October 2012 when 15-foot waves carrying softball-sized stones and tons of sand crashed onto Misquamicut State Beach. The structure there at the time was a bedrock of family tradition, an annual summer destination for the owners and their children and grandchildren. But without insulation to even keep out cold air in winter, it was no match for flooding and gale-force winds. Caldwell describes the storm’s impact in neat and peaceful terms. “After the tidal surge, not much of the house was left,” he says. “Where the living room used to be, there was a 4-foot pile of sand.”

Commissioned to rebuild using the maximum footprint allowed by regulatory agencies, Caldwell designed a flood-resistant foundation using concrete footings and pilings reinforced with rebar and breakaway walls at ground level so the rest of the house will not be compromised by the next big storm. The whole house received airtight insulation, efficient heating and cooling systems, and a third-party-verified air quality measurement that combined to achieve a silver rating by the National Green Building Standard, which is maintained by the National Association of Home Builders, Washington, D.C.

Caldwell gets a lot of customer requests to add rooftop solar panels. Many times he says no because of shading impacts or suboptimal roof orientation that can limit energy production. When site conditions allow for solar, Caldwell usually brings in a subcontractor for the installation. For high-end projects with an aesthetic that requires preserving the architectural integrity of the roofline, Caldwell has his own construction crew, led by foreman Dwayne Smith, install solar shingles that integrate with traditional shingles to form a seam- less roof system. Smith went through a manufacturer’s training program to become a certified roof shingle and solar shingle installer, making Caldwell & Johnson eligible for warranty protection from the supplier and demonstrating to customers that the firm is serious about the product.

Traditional solar panels would not have been suitable for the Westerly beach home, because durability was a principal concern for the client, a retired physicist.

Traditional solar panels would not have been suitable for the Westerly beach home, because durability was a principal concern.

“Durability is a key component of sustainable green building,” Caldwell explains. “Oceanfront homes in our region are exposed to some pretty harsh elements throughout the year, including high winds, ice, salt and more. Fortunately, the individual components of the integrated solar system are up to task, and the fastening system allows the entire array to be secured directly to the roof deck as an integral unit.”

Caldwell was able to easily dispel the concern by referring to the Narragansett Bay project that survived Hurricane Sandy, where his team had installed solar shingles for the first time. “That home came through the storm with no problem at all. The solar energy system turned on and hasn’t had a problem since,” he says.

If the conditions in Rhode Island don’t provide enough assurance that solar shingles can withstand the worst that Mother Nature has to offer, Caldwell can also point to an installation he’s put on his own ski house in the White Mountains of New Hampshire, about 4,000 feet above sea level. “If you wanted to test this stuff, that’s getting on the outer edge of the bell curve,” he says. “I wouldn’t put traditional solar panels there. It would be too dangerous. But in pretty harsh conditions, the solar shingles work great.”

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May/June 2020

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Roofing is a national publication that unravels, investigates and analyzes how to properly design, install and maintain a roof system. Through the voices of professionals in the field, Roofing’s editorial provides a unique perspective.